Now that Amazon has announced that it will locate a logistics hub with 5,000 big-paying jobs in Nashville, what documents related to the $102 million incentive deal are subject to the Tennessee Public Records Act?

The incentives announced yesterday break down this way, as reported by news outlets:

A $65 million grant from the state based on Amazon creating 5,000 jobs and investing $600 million within a seven-year period. The grant can be used for land acquisition, site preparation, building construction, infrastructure improvements and development, including, but not limited to, sewer, water and utility infrastructure, or “any other eligible activities,” according to a Nov. 2 summary of state incentives obtained by news media yesterday.

A projected $21.72 million in job tax credits that Amazon can use against its franchise and excise taxes for a period of 15 years, reducing their taxes by no more than 50 percent in any given year. The projection is based on the company investing $632 million and creating a net new 4,828 jobs within the seven-year period. This is also based on the Nov. 2 summary.

Also, in the announcement, state officials said the incentives were “performance-based,” which hints there might be clawbacks. So if you wanted find out details of any clawback arrangements if the “performance” is not met, or if, say jobs were created then abolished after a few years, you likely would need to see the fine print in the contracts.

Here is where the first set of exemptions to the state’s public records law come in.

Can the public view the proposed contracts?

The largest exemption related to the contracts has to do with timing, both with the state and local incentives.

The Tennessee Department of Economic and Community Development has an exemption that makes the actual contract with Amazon confidential until signed:

T.C.A. §4-3-730 (b) Any binding contract or agreement entered into or signed by the department that obligates public funds shall, together with all supporting records and documentation, be considered a public record and open for public inspection as of the date such contract or agreement is entered into or signed.

Bob Rolfe, commissioner for the Tennessee Department of Economic and Community Development

In the past, state officials have announced the news of new jobs before the deal was signed. So assuming the deal is not signed, the details of the deal — such as any clawback arrangements on the grant and the specific conditions or exceptions to conditions of job creation or investment — will not be available except for what ECD or state officials wish to reveal in interviews.

There is one exception that I’m aware of that might allow the public to see the state’s proposed contract on the $65 million grant before it is signed. For FastTrack grants that exceed $750,000, the State Funding Board has to approve it. If this is a FastTrack grant, here’s the law that applies:

T.C.A. § 4-3-717 (e) The total amount of FastTrack grants or loans made pursuant to these programs shall not exceed seven hundred fifty thousand dollars ($750,000) per eligible business within any three-year period beginning July 1, 2005, unless approved by the state funding board. The state funding board is authorized to establish, by policy or action, the process by which the commissioner of economic and community development shall seek and receive approval for such grants and loans to exceed the dollar limitation.

A few years ago, a Memphis news reporter with the Commercial Appeal tried to get a copy of a large state grant for a Memphis economic development project that was listed on the funding board’s meeting agenda. She was told the contract would not be available until the day of the funding board’s meeting. The reporter was unable to write a story advancing the funding board’s meeting with details of the project. Later, the state appeared to back off of the initial response, and said the contract should have been available before the meeting. So I’m not certain how far in advance someone could get a copy of an Amazon contract if the contract is going before the funding board.

Another catch-all exemption is sometimes used to shield information before or after a grant contract is signed. It’s a broad one and it’s discretionary. If the ECD commissioner thinks releasing documents related to a contract would “seriously harm the ability of this state to compete or conclude agreements or contracts,” he can decide to not release it.

T.C.A. § 4-3-730 (c) (1) Notwithstanding any other law to the contrary, any record, documentary materials, or other information, including proprietary information, received, produced or maintained by the department shall be considered public unless the commissioner, with the affirmative agreement of the attorney general and reporter, determines that a document or information is of such a sensitive nature that its disclosure or release would seriously harm the ability of this state to compete or conclude agreements or contracts for economic or community development.

(2) If the commissioner, with the agreement of the attorney general and reporter, determines pursuant to subdivision (c)(1) that a document or information should not be released or disclosed because of its sensitive nature, such document or information shall be considered confidential for a period of up to five (5) years from the date such a determination is made. After such period, the document or information made confidential by this subsection (c) shall become a public record and shall be open for inspection.

City’s proposed contract may be available now under public records law

Municipalities and counties have a similar “timing” exemption as the state, but it’s looser because the public has a right to see proposed contracts and associated documents before a contract is voted on by the governing body. Here’s the the exemption for municipalities (it is the same for counties):

T.C.A. §6-54-142 (a) Except as otherwise provided in this section, any contract or agreement, together with all supporting records and documentation, that obligates public funds as part of a municipality’s economic and community development program to assist new and existing businesses and industries in locating or expanding in the municipality is a public record subject to title 10, chapter 7, part 5, and open for public inspection as of the date such contract or agreement is made available to members of the governing body. A governing body shall publicly disclose the proposed contract or agreement in a manner that would adequately notify and fairly inform the public of the proposed contract or agreement before voting on the proposal.

I would think the Metro Government of Nashville falls into this exemption. And if any proposed contract for the $15 million has been “made available to members of the governing body,” which I believe would be any member of the governing body, not just the governing body as a whole, that proposed contract and “all supporting records and documentation” would be open now and subject to a request under the public records act.

In addition, the governing body must take a proactive step and publicly disclose the proposed contract in a manner that would “adequately notify and fairly inform” the public of the contract before voting on it.

In addition to the proposed contract, earlier offers to Amazon that didn’t make it into a final contract should also be available. This might cover the city’s offers for the headquarters.

Job tax credit information has sometimes been withheld

The state announced the projected job tax credit amount for Amazon. That is in contrast with another deal this summer with AllianceBernstein, when the state had claimed this information was confidential and refused to release projections. This may be a change in the way ECD interprets the “tax information” exemption, or the state may view the release as discretionary. Here’s the exemption:

67-1-1702. (a) Notwithstanding any law to the contrary, returns, tax information and tax administration information shall be confidential and, except as authorized by this part, no officer or employee of the department or of any office of a district attorney general or any state or local law enforcement agency, and no other person, or officer or employee of the state, who has or had access to such information shall disclose any such information obtained by such officer or employee in any manner in connection with such officer’s or employee’s service as an officer or employee, or obtained pursuant to this part, or obtained otherwise.

One interesting element of the Amazon job tax credits is that it allows Amazon to make the planned investment and create the jobs over seven years.

The law on job tax credits defines the required investment period as being three years.

T.C.A. § 67-4-2109 (4) “Investment period” means the period during which qualified jobs are created as a result of the required capital investment; provided, however, that the period shall not exceed three (3) years from the effective date of the business plan;

But there are many exceptions within the tax credit statute that allow modifications to standard requirements, including allowing the ECD and Revenue commissioners to make adjustments to the requirements if they determine that the adjustments are in the “best interest” of the state.

I recently asked for documents related to the “best interest” determinations by the two commissioners since 2011 and ECD denied the request based on the “tax information” exemption. While ECD would not reveal which companies got adjusted terms for tax credits, or what exactly those adjustments were, ECD did share that its commissioner has signed “approximately 15 best interest letters” and about 10 of those letters extended the investment period necessary to qualify for the tax credits.

So if the seven-year period was an adjustment to the terms allowed by statute for a tax credit, I think it is unlikely that ECD will share the documents associated with that adjustment.